Govt determined to impose over Rs 40b taxes on gas consumers

ISLAMABAD - The cash starved PPP-led coalition government is set to fetch billions of rupees from the gas consumers by inflicting hefty taxes through tabling of two bills in the Senate on Wednesday (today), it was learnt reliably on Tuesday. Financial wizards at the same time argued that the beleaguered government in this desperate bid simply intends to get protective cover of Parliament over its irrational and undue endeavours in gas sector. "The hard pressed government is desperately introducing these bills in the NA and Senate only to protect, preserve and enrich its own adventures in gas sector though it had not completed the consultation process with the stakeholders so far", a source said, adding that both money bills have already been tabled at the floor of National Assembly. According to available agenda items of the Senate session, Finance Minister Dr Abdul Hafeez Sheikh is set to table these two bills including the Petroleum Products (Petroleum Levy) (Amendment) Bill, 2011 and the Gas Infrastructure Development Cess Bill, 2011 before the Senate, under Article 73 of the Constitution, for making recommendations, if any, thereon to the National Assembly. Sources have informed that under these bills, the incumbent government is determined to impose taxes worth more than Rs 40 billion on Liquefied Petroleum Gas (LPG) and Liquefied Natural Gas (LNG). It was also learnt that the government, setting aside the agenda items, has already brought both bills to the floor of National Assembly while leaving the parliamentarians in darkness by not providing copies of both these bills to them. Furthermore, according to these bills, the government is all set to impose levy on CNG while on LPG, it is planned to inflict a levy worth $120/metric tons. A surcharge worth Rs 80/mmbtu on the gas being provided to fertilizer plants and Rs70/mmbtu to Independent Power Plants (IPPs) while Rs 70/mmbtu to captive powers. However, this surcharge will not be inflicted on the domestic consumers of the country. Document of the Petroleum Products (Petroleum Levy) Ordinance, 1961 that is now being replaced at once with Petroleum Products (Petroleum Levy) Ordinance, 2011 by the incumbent government, available with TheNation, revealed that these bills shall come into force at once. "Every company, refinery and license shall pay to the Federal Government a petroleum levy on petroleum products at such rate as may be notified by the Federal Government in the official Gazette, from time to time. For the word "surcharge", the words "petroleum levy" shall be substituted. The cess shall be utilized for or in connection with infrastructure development of Iran-Pakistan pipeline project, LNG or other projects or for price equalization of other alternative fuels. The cess paid by a company shall be an expenditure for which allowance is to be made under the Income Tax Ordinance, 2001 (XLIX of 2001) in computing the profits or gains of that company. The Federal Government may, by notification in the official Gazette, make rules for carrying out the purposes of this Act. In particular and without prejudice to the generality of the foregoing power, such rules may provide for; (a) the manner and time of payment of cess; (b) the manner of collection and recovery of arrears of cess; and (c) any other matter for which provision is, in the opinion of the Federal Government, necessary for carrying out the purposes of this Act. The Federal Government may, by notification in the official Gazette, make such amendments in the schedule as it thinks fit".